Thursday, May 29, 2008

France to Issue Gold and Silver Coins as Legal Tender, and Without Dissuasive Taxation?

Although I'm not an expert on the legalities of legal tender either in the US or France, I think that France is about to begin issuing euro coins in silver and gold equal to the metals' market price.

[Thanks to the for this image of another coin.]

I'd love to have further information from anyone who is familiar with this subject.

Here is the article at the website.

A translation of the principal paragraphs follows:

"The big news is that the face value of these new silver coins (5, 10, 15, 25, 50 euros) and gold coins (100, 250 and 500 euros) will be equal to their market value. 'We will be able to use them for purchases or to save them as a precious souvenir.'

"The first issue, starting September, will be the 5 euro coins (2 million units), 15 euros (500,000) and 100 euros (50,000). In 2009 will appear 10, 25 and 250 euros. In 2010, 50 and 500 denominations will be put into circulation.

"The coins will be available for purchase in 1,000 of the 17,000 postal agencies. 'This is the greatest capillary distribution network that we could have dreamed of, so as to reach the greatest number of French people,' emphasized Christophe Beaux.

"He estimates that 'the introduction of about 20 million euros of purchasing media is infinitessimal compared to the one trillion in existence.' 'Furthermore, we believe that 90 percent of these coins will never circulate, because of their sentimental value,' he says."

I cannot believe what I am reading. Is France going to issue coinage in gold and silver that will be legal tender? Someone, please enlighten me. If so, this is a true bombshell. Either that, or the producers of these coins realize that they will be taken off the market as quick as they appear.

Economists, and coin producers whether public or private, are aware of Gresham's Law, whereby good money (like gold and silver) will immediately be withdrawn from circulation by a public leery of the bad money (paper euros and dollars).

Here are some more links to this story, in the original French:

Boursorama article article article website (State coinage facility)

From what I understand after perusing the Monnaie de Paris website, this national entity produces all of France's coins, but also much commemorative coinage, just like the Mint does in the US.

I'm still not clear as to whether these coins are legally to be considered as commemorative or as legal tender, nor whether these coins will be sold without TVA or sales tax or other capital gains treatment.

From what I understand about the US, our own Mint's gold coins may be legal tender, but there are laws on the books that prevent us from writing contracts based on anything other than what the Congress calls legal tender, and today that must include fiat paper currency, and may even exclude gold or other commodities of more intrinsic value than paper. (Someone, please enlighten me.)

I know that it is illegal to produce private coinage as legal tender, to wit what happened to Bernard von NotHaus. I think he's still fighting.

To be continued. Oh, and something else I noted on that Monnaie de Paris website: A lot of the gold coins for sale are "tirage epuise" -- out of stock.

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Wednesday, May 28, 2008

The Demise of the Big Bear

Read this three-part series about Bear Stearns's last days. It's fascinating. I can't wait for Part 3 tomorrow. I'll add it to this post.

[Thanks to for the photo.]

Part 1

Part 2

Part 3

This will make a great movie. Hint hint.

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Saturday, May 24, 2008

Ron Paul: The Last of the True Political Economists?

I like Ron Paul. It's a personal thing.

I think I can say this openly and without fear of being closed down by the Election Police, now that he has no chance of winning the election.

[Thanks to the great illustrator David Dees, at and for this image. I am now one of Dees's best fans. Take a look at some of his great political satire at this website.]

Given Paul's meek chances of success in his presidential bid, this could in no way be construed as a political endorsement; but just to avoid any appearance of political bias, I will do my best to find qualities in the other candidates--Hillary-Babe, Obama-Rama, and Johnny Mc-See--just to balance out this blog. (If and when I get around to it.)

But Paul just seems to me like my kind'a guy. He speaks from the hip, he doesn't mince his words, and he knows what he's talking about, in most instances. And he reminds me of my father, economist Edward C. Harwood (see Page 7 in the pdf version, that is to say Page 3 in the print version), in that he comes across, and probably is, a man of great integrity.

He also referred to my Dad's American Institute for Economic Research several times over the years in his Congressional speeches. What's not to like, right?

Well, actually, I can find fault with him, for example: Just the fact that he's not electable for the presidency, probably due to what may be misleading signs of physical age and frailty. Don't kid yourself, the man's going to be a centenarian. He's as tough as an old grape vine--has to be, to withstand the stresses of campaigning and holding government office--and will probably be just as ornary and hard to unseat right up until the day he croaks.

Or perhaps his lack of presidential electability is due to the above-said integrity, i.e. he won't conform to the political establishment's demands, which conformation is a prerequisite for their support. More power to him, at least as a human being if not as our president. At least he'll die with his nose clean.

And just to clear up the record, he is not a believer in the 9/11 conspiracy theory, as confirmed in this interview with Glenn Beck; so we can stop wondering if there's a glitch in the man's thinking somewhere.

His principal appeals are that (1) his economic thinking is right on, unlike any other presidential candidate I can think of; and (2) he has a marvelous way of expressing himself that makes even as boring a subject as economics relevant to all of us. In this, he also resembles my economist Dad. [See above link.]

Here are some excerpts from his recent book, Pillars of Prosperity, reprinted at the website.

On the recession:

"When the recession hits full force [because he believes it going to hit us sooner or later], even the extraordinary power and influence of Alan Greenspan and the Federal Reserve, along with all the other central banks of the world, won't be able to stop the powerful natural economic forces that demand equilibrium. Liquidation of unreasonable debt and the elimination of the over-capacity built into the system and a return to trustworthy money and trustworthy government will be necessary."

On Federal Reserve monetary policy:

"Deliberately lowering interest rates isn't even necessary for the dollar to drop, since our policy [of over-creation of currency through credit] has led to a current-account deficit of a magnitude that demands the dollar eventually readjust and weaken."

"A slumping stock market will also cause the dollar to decline and interest rates to rise. Federal Reserve Board central planning through interest-rate control is not a panacea. It is instead the culprit that produces the business cycle. Government and Fed officials have been reassuring the public that no structural problem exists, citing no inflation and a gold price that reassures the world that the dollar is indeed still king.

"The Fed can create excess credit, but it can't control where it goes as it circulates throughout the economy; nor can it dictate value either. Claiming that a subdued government-rigged CPI and PPI proves that no inflation exists is pure nonsense. It is well established that, under certain circumstances, new credit inflation can find its way into the stock or real estate market, as it did in the 1920s, while consumer prices remain relatively stable. This does not negate the distortion inherent in a system charged with artificially low interest rates. Instead it allows the distortion to last longer and become more serious, leading to a bigger correction."

On gold:

"If gold prices reflected the true extent of the inflated dollar, confidence in the dollar specifically and in paper more generally would be undermined. It is a high priority of the Fed and all central banks of the world for this not to happen. Revealing to the public the fraud associated with all paper money would cause loss of credibility of all central banks. This knowledge would jeopardize the central banks' ability to perform the role of lender of last resort and to finance/monetize government debt. It is for this reason that the price of gold in their eyes must be held in check.

"From 1945 to 1971, the United States literally dumped nearly 500 million ounces of gold at $35 an ounce in an effort to do the same thing by continuing the policy of printing money at will, with the hopes that there would be no consequences to the value of the dollar. That all ended in 1971 when the markets overwhelmed the world central banks.

"A similar effort continues today, with central banks selling and loaning gold to keep the price in check. It's working and does convey false confidence, but it can't last. Most Americans are wise to the government's statistics regarding prices and the "no-inflation" rhetoric. Everyone is aware that the prices of oil, gasoline, natural gas, medical care, repairs, houses, and entertainment have all been rapidly rising. The artificially low gold price has aided the government's charade, but it has also allowed a bigger bubble to develop. This policy cannot continue. Economic law dictates a correction that most Americans will find distasteful and painful. Duration and severity of the liquidation phase of the business cycle can be limited by proper responses, but it cannot be avoided and could be made worse if the wrong course is chosen."

On the Fed's effectiveness:

"Micromanaging an economy effectively for a long period of time, even with the power a central bank wields, is an impossible task."

"... the Federal Reserve now buys and holds GSE securities as collateral in their monetary operations. These securities are then literally used as collateral for printing Federal Reserve notes; this is a dangerous precedent."

"But the day will come when we will have no choice but to question the current system. Yes, the Fed does help to finance the welfare state. Yes, the Fed does come to the rescue when funds are needed to fight wars and for us to pay the cost of maintaining our empire. Yes, the Fed is able to stimulate the economy and help create what appear to be good times. But it's all built on an illusion. Wealth cannot come from a printing press. Empires crumble and a price is eventually paid for arrogance toward others. And booms inevitably turn into busts."

"Talk of a new era the past five years has had many, including Greenspan, believing that this time it really would be different. And it may indeed be different this time. The correction could be an especially big one, since the Fed-driven distortion of the past 10 years, plus the lingering distortions of previous decades have been massive. The correction could be big enough to challenge all our institutions, the entire welfare state, Social Security, foreign intervention, and our national defense. This will only happen if the dollar is knocked off its pedestal. No one knows if that is going to happen sooner or later. But when it does, our constitutional system of government will be challenged to the core."

On generational forgetfulness:

"Thomas Jefferson was worried that future generations might squander the liberties the American Revolution secured. Writing about future generations, Jefferson wondered if 'in the enjoyment of plenty, they would lose the memory of freedom.' He believed, 'Material abundance without character is the path to destruction.'"

On Big Government:

"For far too long, we have accepted the idea that government can and should take care of us. But that is not what a free society is all about. When government gives us something, it does two bad things. First it takes it from someone else; second, it causes dependency on government. A wealthy country can do this for long periods of time, but eventually the process collapses. Freedom is always sacrificed and eventually the victims rebel. As needs grow, the producers are unable or unwilling to provide the goods the government demands. Wealth then hides or escapes, going underground or overseas, prompting even more government intrusion to stop the exodus from the system. This only compounds the problem.

"Endless demands and economic corrections that come with the territory will always produce deficits. An accommodating central bank then is forced to steal wealth through the inflation tax by merely printing money and creating credit out of thin air. Even though these policies may work for a while, eventually they will fail. As wealth is diminished, recovery becomes more difficult in an economy operating with a fluctuating fiat currency and a marketplace overly burdened with regulation, taxes, and inflation."

"Our economic, military, and political power, second to none, has perpetuated a system of government no longer dependent on the principles that brought our Republic to greatness. Private-property rights, sound money, and self-reliance have been eroded, and they have been replaced with welfarism, paper money, and collective management of property. The new system condones special-interest cronyism and rejects individualism, profits, and voluntary contracts."

'Nuff said.

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Friday, May 23, 2008

Government Rations Silver Coins - Is Gold Next?

I knew this was coming. Long-time readers know my adage:

You can take gold out of the standard, but you can't take the standard out of gold.

I guess the same applies to silver.

[Thanks to for the image.]

According to this article at the Wall Street Journal, buyers are beginning to hoard 2008 silver dollars, and the government has now started to limit their sale.

Will gold be next?

As it stands, the government already taxes us on gold sales under certain circumstances, depending upon your country and state of residence. You understand the reason for this when you consider what the governments of this world have to lose.

You see, if they were to allow gold to be bought and sold without some kind of discouragement like a sales tax, capital gains tax, or some such, and if people were suddenly to decide that gold and silver were better stores of value than paper money, governments could lose control of money, the value of paper currency would sink like a split canoe, and, as the saying goes, all hell could break loose.

Keep you eyes open for further events in this regard. Looks like the government is getting squeemish about the public's awareness of our current commodity bubble that may turn into a run on gold and silver; and the government may just try to do something about it before that happens.

Gold and silver fans: Beware Big Brother.

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Monday, May 19, 2008

A Half-a-Billion Dollar Bill?

Yes, that's what you read, a dollar bill that is denominated as $500,000,000.

It was issued and printed in Zimbabwe where they also call their currency the "dollar." It's worth about $2.03 US dollars. (Source.)

Here's a picture of an earlier note for Z$50,000,000 first issued in April of this year:

[Thanks to for the photo.]

Here's a translation of the original Reuters article in a French newspaper called Liberation:

"It would be funny if it wasn't tragic: Zimbabwe just placed in circulation a new bank note for a value of half a billion Zimbabwean dollars. The new note, put into circulation a mere ten days after two others valued at 100 and 250 million dollars, is the fourth since the beginning of the year. The first, for a value of 50 million dollars, came out on April 2.

"Formerly the wheat basket of the region, Zimbabwe has been floundering for eight years in an unprecedented economic recession, marked by record hyperinflation approaching 165%, according to the latest figures published in February."

A loaf of bread in Zimbabwe cost $16 million in April. Now it is probably double that.

Well, don't laugh. That's what happens when a nation doesn't respect its monetary unit and tries to use it as funny money. (See my original posts for economics lessons on this subject.)

You may think that the US is immune to this threat, but think again. We may be less disrespectful than Mr. Mugabe of the people's money, but I note symptoms of the disease even at our own central bank, the Federal Reserve.

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Thursday, May 15, 2008

To Burst Bubbles or Not to Burst Bubbles, That is the Question

The Fed just doesn't seem to get it. In this blog post at the Wall Street Journal, we see evidence of a disease called Federal Governor Malaise.

The poor fellows can't see the bubbles in front of their face, much less can control them. In fact, some of our dear Governors don't even want to try to identify them.

[Thanks to for the photo.]

Apparently, none of the distinguished Governors remembers the invisible hand and its role of the marketplace. They've never read Leonard E. Read's famous essay about the workings of that hand, how very astutely it controls progress with no apparent controller, as illustrated in the manufacture of as simple a product as a pencil, "the ordinary wooden pencil familiar to all boys and girls and adults who can read and write."

If individually we couldn't even invent a pencil, how can we control international monetary bubbles?

Nor do our confused Governors seem to have learned the lessons from history, those examples of how human elitists, believing they have the power to conduct human activity in a manner better than the invisible hand, have only managed to distort progress and thrown their societies into chaos.

Reading Governor Gary Stern's blatantly naive statements demonstrates to me how inefficient we are at controlling our own monetary policy. They don't know how to control bubbles, indeed can't even identify one when they see one.

Wouldn't you think that, having observed their own lack of expertise, they might proffer their resignations and recommend that we reinstate a more reliable monetary standard, one that has been shown in the past to control the amount of purchasing media circulating at any one moment through its own innate nature, thereby inhibiting the appearance of monetary bubbles?

No, apparently either (1) our Governors' lack of knowledge drives them to the opposite conclusion: If you can't beat 'em, join 'em; let the bubbles happen, and to hell with the devastating consequences on the pocketbook of the ordinary man and woman of society; let the speculators take the spoils; or

(2) their full knowledge of the situation is so synical that they purposely keep us confused so as to aggrandize themselves and those who put them in office.

NB: For those readers who are curious about my thoughts regarding the cause of our bubbles, I would direct them to read my earliest posts about money, the history of the gold standard, the state of our present fiat currency, the relationship between economics and government, and the use of monetary manipulation to increase government power.

Wednesday, May 14, 2008

The Wealth Gap: Let's Not Rush to Judgment

If it weren't for the fact that the article is well written, I'd have to describe Thomas Frank's editorial in the Wall Street Journal as more than a little irksome.

I don't deny him his (or actually Steven Greenhouse's) statistics about the growing wealth gap in this country.

[Thanks to for this image.]

What I dislike is his unfounded leap to a conclusion as to its cause.

Both Frank's editorial and Greenhouse's The Big Squeeze are about the impoverishment of the American worker majority and the enrichment of the power class minority; and both works are probably good reads. However, both writers are more journalistic than scientific in their analysis of the causes of this situation. (Too bad we have to use "journalistic" as an antonym of "scientific," but that's just the way it is in many cases including these.)

Frank sees the evil as emanating from classical economic principles as empowered by the Reagan Republicans. Greenhouse points his finger at the same politicians' destruction of the working class's labor movement.

In other words, both writers are probably progressive Democrats and believe in equality of riches, as contrasted to equality of opportunity in the more strict Constitutionist sense.

I don't deny the growing gap and I don't pretend to have the right answer; but before we assume either of these thinkers is correct, here are a few suggestions that might deserve some equal time under the reader's microscope:

1. What about the world central bankers' mismanagement of the monetary units, which mismanagement some believable economists blame for: (a) our current credit and mortgages crises, (b) the huge imbalances in trade and sovereign reserve accounts, and (c) for the erosion of everyone's purchasing power and of the real wages of the majority of working people? These economists believe that our purchasing power should have exploded over the last century, but instead the money mis-managers have siphoned it off to the wealthy speculators and encouraged us all into an unhealthy degree of debt.

2. Going back even further, what about the de-standardization of the currencies? The value of our money used to be established by law to be equal to a specific amount of gold and/or silver but became equal to whatever governments, government agencies, and markets decided they would be worth via fiat. History does not treat this kind of monetary de-standardization kindly. It has always led to dissatisfaction and disruption of social order.

3. Then there's also the increasing centralized government power in this country that has opened up the Pandora's Box of legislative intervention into every sector of our life. (See my "Government Intervention Run Amuck" series of posts over the last few months, which give only a sampling of the damages done.)

Just food for thought, before you jump along with Frank and Greenhouse into a tidal wave of emotionally appealing but premature and illegitimate conclusions.

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Tuesday, May 13, 2008

Government Intervention Run Amuck No. 15: Social Security Disability Insurance

Today's commentary at the American Institute for Economic Research (the only truly unbiased economic research program I know of) gives us another great example of the unintended consequences of government intervention, even if the legislators' intentions were good--or at least innocent--at the inception.

The number of people receiving disability insurance has increased way above what the statistics should be, leading us to conclude that:

When you put out the bird feeder, the birdies will come.

[Thanks to for the photo.]

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Monday, May 12, 2008

Government Intervention Run Amuck No. 14: Barney Frank

Barney Frank takes the cake as an example of government's mucky intervention.

[Thanks to for the photo.]

Today's Wall Street Journal editorial on the Legislature's latest effort to intervene in the housing markets reveals just how far the nation has progressed towards interventionnism.

I hope Bush has the sense and courage to veto this one.

Here are a few citations of the terms of Mr. Frank's proposed new laws:

"If both borrower and lender agree to participate, lenders can accept 85% of the current appraised mortgage value and in return get to dump up to $300 billion of those loans on the Federal Housing Administration (FHA)." [And who pays the bill for that? Why, you and I, of course.]

"'If we see a widespread refusal on the part of servicers to cooperate voluntarily in what we see as an important economic problem . . . they can expect much tougher regulation in the future.' And they called Tom DeLay 'the Hammer'?" [I guess blackmail is the new Congressional tool.]

"State governments receive authority to issue $10 billion in tax-exempt bonds to subsidize home purchases and to help subprime borrowers refinance." [Sure. Give 'em some more money so that they can keep that house they can't pay for.]

"Mr. Frank also expands the low-income housing tax credit, and he creates a new refundable credit for certain home buyers. To help defray the cost to the Treasury, Mr. Frank raises taxes on multinational companies by delaying a scheduled reform." [Talk about robbing Peter...]

"Then there is the $230 million for housing counseling to be distributed by the Neighborhood Reinvestment Corporation." [Housing counseling??]

"Also included is this addition to the Home Owners' Loan Act: 'A Federal savings association may make investments, directly or indirectly, each of which is designed primarily to promote the public welfare . . . through the provision of housing, services, and jobs.' Mr. Frank has got to be kidding." [No surprise to me. We're back to trying to confuse the public about what that phrase in the Constitution, "public welfare," really means. Good grief.]

And then this conclusion by the WSJ staff:

"The Frank plan appears to take care of everyone in the housing market, except the renters and homeowners who lived within their means."

Hear, hear.

I can't decide whether we should be thankful or not about the fact that most of these efforts will fail. Unfortunately, we taxpayers will end up holding the stick either way.

Update: Maxine Waters is going to take Second Prize for Mucky Intervention, for her new bill, which would give money to states so they can buy foreclosed homes.

What next.

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Thursday, May 08, 2008

Fannie About To Fall on It?

[Thanks to for the image.]

Both Fannie Mae and Freddie Mac are way over their head in potential debt at this point. The legislators have seen fit to burden them with saving the country from the bursting mortgage bubble (actually a monetary bubble in my opinion).

The problem is that we, the taxpayers, will be called upon to cushion that fall, because the only outcome of a falling Fannie would be for our government to take her over and foot us with the bill.

See this great graphic at the New York Times, linked through this informative article by Charles Duhigg, linked through this great blog post at Peter Viles's LA Land blog at the LA Times.

And like dominoes, Freddie Mac, Sallie Mae (student loans), and the Federal Housing Administration are not far behind; then who knows, maybe even the FDIC (Federal Deposit Insurance Corporation) and the PBGC (Pension Benefit Guarantee Corporation)--but whoa, let's not panic yet.

As econonomists say, it is always easier to spend money when it's not your own. Legislators are not immune to this economic rule.

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Tuesday, May 06, 2008

But Bernanke, That's a Contract You're Trying to Destroy

I don't understand where Bernanke is coming from these days. Now he's pushing government intervention into the mortgage market, advising lenders to write off the value of mortgage collateral to "save" those homeowners who are in a credit squeeze.

I like the way Peter Viles analyzes the situation in his real estate blog at the LA Times.

What Professor Bernanke seems to be ignoring is the fact that these mortgages are contracts; and the contract is a vital element of our way of life.

An illustration:

The subway schedule.

[Thanks to for the photo.]

A large city's subway system publishes a schedule so that commuters can make it to work every day at the same time, no matter what the volume of riders.

This schedule is a contract between the subway company and their customers, and it is immutable except in rare cases of danger to the public. It never changes, not even when 10,000 commuters' alarm clocks don't ring.

Can you imagine if the city decided to heed all the hate thoughts coming their way and delayed the 7:30 a.m. train, because a few thousand--or even a million--commuters didn't like to get up in the morning?

If they started to do that, commuters would start researching alternative means of transport, just in case. What a waste. It would result in the diversion of millions of dollars of consumer spending towards bicycles, running shoes, and second cars, and a wave of real estate conversion to accommodate the new parking needs.

This is only a light-hearted example. But imagine what would happen if the government started to bail out former renters who have bought homes that are too expensive for their means. It would mean that lenders would begin to raise prices to cover the risk of future government intervention into the contracts they will sign with tomorrow's borrowers.

Or what if the Federal Reserve were to start bailing out big finance houses......

AAACK! Good grief. I forgot; they have already done that.

Oops. I wonder what contracts will be next. Student loans? Credit cards? Municipal bonds? Pension funds?

Nah, they can't be that stupid..... can they?

Friday, May 02, 2008

There Goes Another Property Right

There is much talk these days of government intervention into the mortgage market. In some quarters, legislators are trying to "freeze" mortgage contracts and other such manoeuvers.

This is a direct attack on a fundamental American right and a renoucement of one of the only legitimate purposes of government: The legal enforcement of contracts.

A contract is an agreement between at least two parties regarding disposition of property of some kind, whether it be land, labor, work of art, faithfulness and material support (most marriage contracts), or whatever.

The notion of property rights is the human attempt at legal standardization of the basic rights nature has given us, which legalized standardization permits us to maximize mutual respect, equality of opportunity, and individual liberty.

The importance of the respect of property rights--including those protected by contract--is one of the fundamental and least appreciated elements of the American experiment.

More importantly, if we do not respect these property rights, we impinge not only upon those rights, but also upon the basic rights nature gave us. If we persist in this impingement we eventually destroy the equality of opportunity and liberty we so crave.

Unfortunately, property rights have taken some beating over the years, as Amity Shlaes points out in this great review of a book called The Dirty Dozen by Robert A. Levy and William Mellor, accusing Supreme Court justices of contributing to the erosion of property rights in the United States.

[Thanks to for the image.]

Levy and Mellor list the Supreme Court's twelve most egregious cases, ending with the Kelo case where Mrs. Kelo was obliged to sell her home to a developer in spite of her wishes, a complete misinterpretation of one of the clauses of our Constitution.

This point is so important that it can stand alone; but I must add this:

The destruction of property rights is indeed a fundamental hurdle to the preservation of the American experiment as the Founding Fathers intended it. However, I'm upset that no modern thinker goes beyond the surface erosion of respect for property rights to search for other root causes.

What permitted the public acceptance of this erosion? It is the injustices perpertrated through (1) mismanagement of the monetary units of the world, and (2) less-than-optimum land taxation policy.

These two government errors together caused the dire circumstances of the farmers and landlords alike, of both the department store owners and city governments alike, et al., that in turn gave rise to the public empathy for those who were suffering. The land and property seizures are the direct result of the unintended consequences of (1) inflation and (2) counterproductive land taxation; and it is these injustices that set the stage for further government meddling and even more unintended consequences.

Unfortunately, a blog like this is too ephemeral a place to go into depth about this. For the fundamental argumentation, see the work of Edward C. Harwood and Henry George, who are looking wiser and wiser as my economics apprenticeship advances.

As an aside, both of these gentlemen were unique self-taught thinkers who had not acquired any academic degrees in economics. This gives cause for reflection.

Of course I do not mean to belittle the achievements of the erudite professors and doctors who have contributed much to the science's progress. Having said that, some of these learned people--Supreme Court justices and Federal Reserve and other economic advisers among them--do or should know better and are personally responsible for the very problems we suffer today.

Another aside: Amity Shlaes is the writer of the great book The Forgotten Man.

Thursday, May 01, 2008

Bernanke, Please Listen to These More Common Men (Including One Politician, Believe it or Not)

Economist Brian Wesbury and House Representative Paul D. Ryan from Wisconsin have both written some great pieces in the Wall Street Journal over the last two days.

Brian Wesbury on the Fed's Loose Monetary Policy Deja Vu; see also Brian's excellent testimony in Washington on the subject;


Paul Ryan's
great piece this morning on the Fed's conflicting mandate. Believe it or not, Ryan is a House representative (yes a politician) and is on the Budget and Ways and Means Committees. I guess he's another one of the few unsung politicians who makes sense. He's going to present legislation called the Price Stability Act of 2008 to solve the Fed's conflict.

I'm already thinking of nominating him for the Presidency in 2012.

I had addressed the conflict now present in the Federal Reserve's mission in this article (Page 1, Page 2, and Page 3) at the LA Business Journal; and in this Prudent Bear piece (the same idea but in more depth); and, come to think of it, in lots of my articles over the past few years. (See column to the right.)

[Thanks to for this image.]

But who's listening to me?

Maybe a bona fide economist and an elected official can catch Ben's ear.

One thing is sure: We're all going to have to scream like banshees in order to be heard over the self-interested din of Wall Street, in concert with the inflationary and debt-exploding cacaphony emanating out of the other halls of the Senate, the House, the White House, and those aspiring to this last.

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